NZLC - Report 52: Cross-Border Insolvency - Should New Zealand Adopt UNCITRAL Model Law on Cross-Border Insolvency?

8 Grounds on which registered bank may be declared to be subject to statutory management

An Act to give effect to the provisions of the Model Law on Cross-Border Insolvency (adopted by the United Nations Commission on International Trade Law) as they relate to New Zealand

1 Short Title and commencement

(1) This Act may be cited as the Cross-Border Insolvency Act 200–.

(2) This Act comes into force on a date to be appointed by the Governor-General by Order in Council.

Model Law

2 Meaning of Model Law

In this Act

Model Law means the Model Law on Cross-Border Insolvency (adopted by the United Nations Commission on International Trade Law on 30 May 1997 and approved by the General Assembly of the United Nations on 15 December 1997) which has been amended and supplemented in order to apply to New Zealand and which is set out in the Schedule.

3 Act to bind the Crown

This Act binds the Crown.

4 Model Law to have force of law

The provisions of the Model Law have the force of law in New Zealand.

5 Applications under Model law

(1) An application under the Model Law is to be made to the High Court by an originating application in the manner provided for by Part IVA of the High Court Rules.

(2) Subsection (1) does not prevent the High Court from exercising its inherent power to make an order on an oral application in circumstances of unusual urgency.

6 Rules

Rules may be made for the purposes of this Act under section 51C of the Judicature Act 1908.

COMMENTARY

C1 The following commentary is intended to complement that already provided with the Model Law in its Guide to Enactment. In this absence of commentary to a particular article, or for more detailed explanation, readers are directed to the reproduction of the Model Law and commentary in the appendix to this report (see pages 99–140) and the reference table at page xvi.

Section 1

C2 Section 1(2) provides that the draft Act is to come into force on a date to be appointed by the Governor-General by Order-in-Council. It is envisaged that the draft Act will not be brought into effect until the New Zealand Government is satisfied that the Model Law is, or shortly will be, enacted by a number of states with which New Zealand has major trading relationships. This will also allow s 135 of the Insolvency Act 1967 and s 342 of the Companies Act 1993 to continue in effect until such time as the Cross-Border Insolvency Act comes into force (see sections 9 and 10 of the draft Act which repeal those provisions).

Section 2

C3 This provision defines the Model Law as the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law as adapted for New Zealand conditions and set out in the schedule to the draft Act.

Section 3

C4 The draft Act binds the Crown.

Section 4

C5 The provisions of the Model Law as set out in the schedule to the draft Act are given the force of law in New Zealand.

Section 5

C6 This section provides for the procedure to bring an application under the Model Law.

Section 6

C7 This section enables rules to be made for the purposes of the Cross-Border Insolvency Act under s 51C of the Judicature Act 1908. These Rules can provide detailed requirements, if necessary, for the making of applications under the Cross-Border Insolvency Act.

Other amendments

7 Master may exercise certain powers of the Court

Section 26I (2) of the Judicature Act 1908 is amended by adding the following paragraph:

“(k) The Model Law on Cross-Border Insolvency as set out in the Schedule of the Cross-Border Insolvency Act 200–.”

8 Grounds on which registered bank may be declared to be subject to statutory management

Section 118 of the Reserve Bank of New Zealand Act 1989 is amended by repealing subsection (1), and substituting the following subsections:

“(1) The Bank may not make a recommendation under section 117 unless it is satisfied on reasonable grounds that–

(a) It is necessary to appoint a statutory manager in order to

(i) Promote the maintenance of a sound and efficient financial system; or

(ii) Avoid significant damage to the financial system that could result from the failure of a registered bank; and

(b) One or more of the circumstances in subsection (1A) are met.

(1A) The circumstances referred to in subsection (1) are as follows:

(a) The registered bank is insolvent or is likely to become insolvent; or

(b) The registered bank has suspended, or is about to suspend, payment or is unable to meet its obligations as they fall due; or

(d) The registered bank or any associated person has failed to comply with a direction under section 113; or

(e) The affairs of the registered bank or any associated person are being conducted in a manner prejudicial to the soundness of the financial system; or

(f) The circumstances of the registered bank or any associated person are such as to be prejudicial to the soundness of the financial system.”

Repeals

9 High Court to act in aid of overseas courts

Section 135 of the Insolvency Act 1967 is repealed.

10 Liquidation of assets in New Zealand

Section 342 of the Companies Act 1993 is repealed.

Section 7

C8 The amendment to s 26I(2) of the Judicature Act 1908 made by section 7 enables a Master of the High Court to exercise all powers under the Model Law in open court. Thus, any appeal from a decision of the Master would be made directly to the Court of Appeal.

C9 The right to apply to transfer a proceeding from a Master to a judge remains under s 26N of the Judicature Act 1908.

Section 8

C10 Section 8 amends s 118 of the Reserve Bank of New Zealand Act 1989 to make it clear that a recommendation for the appointment of a statutory manager under that Act can only be made by the Reserve Bank if the Reserve Bank is satisfied, on reasonable grounds, that it is necessary:

to promote the maintenance of a sound and official financial system; or
to avoid significant damage to the financial system that could result from the failure of a registered bank.

Otherwise, the terms of s 118 of the Reserve Bank Act remain intact.

Section 9

C11 This section repeals s 135 of the Insolvency Act 1967 so that the only procedure which will be available for cross-border insolvency applications in cases of personal bankruptcy will be via the Cross-Border Insolvency Act.

Section 10

C12 This section repeals s 342 of the Companies Act 1993 so that from the date of commencement of the Cross-Border Insolvency Act all applications of a cross-border insolvency nature relating to companies will need to be made under the Cross-Border Insolvency Act.

[The provisions of this Schedule correspond, for the most part, to the provisions of the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law on 30 May 1997, and approved by the General Assembly of the United Nations on 15 December 1997. Certain changes have been made to amend or supplement the provisions of the Model Law in its application to New Zealand. The following table of provisions is not part of the Model Law on Cross-Border Insolvency and is included for convenience.]

Preamble The purpose of this Law is to provide effective mechanisms for dealing with cases of cross-border insolvency so as to promote the objectives of: (a) cooperation between the courts and other competent authorities of this State and foreign States involved in cases of cross-border insolvency; (b) greater legal certainty for trade and investment; (c) fair and efficient administration of cross-border insolvencies that protects the interests of all creditors and other interested persons, including the debtor; (d) protection and maximization of the value of the debtor’s assets; and (e) facilitation of the rescue of financially troubled businesses, thereby protecting investment and preserving employment. Article 1. Scope of application (1) Except as provided in paragraph (2) of this article, this Law applies where: (a) assistance is sought in New Zealand by a foreign court or a foreign representative in connection with a foreign proceeding; or (b) assistance is sought in a foreign State in connection with a New Zealand insolvency proceeding; or (c) a foreign proceeding and a New Zealand insolvency proceeding in respect of the same debtor are taking place concurrently; or (d) creditors or other interested persons in a foreign State have an interest in requesting the commencement of, or participating in, a New Zealand insolvency proceeding. (2) This Law does not apply to a registered bank within the meaning of section 2 of the Reserve Bank of New Zealand Act 1989 that is subject to statutory management under that Act.	Article 1 C13 Article 1(2) makes it clear that the Model Law cannot apply to a registered bank within the meaning of s 2 of the Reserve Bank of New Zealand Act 1989 which is subject to statutory management under that Act. Article 1(1) is prefaced with the words “except as provided in paragraph (2) of this article” to make it clear that article 1(2) takes precedence over article 1(1). It is envisaged that placement of a bank into statutory management under the Reserve Bank Act after the making of an order under the Model Law would provide the basis for an application to terminate any such order under article 22.
Article 2. Definitions For the purposes of this Law (a) foreign proceeding means a collective judicial or administrative proceeding in a foreign State, including an interim proceeding, pursuant to a law relating to insolvency in which proceeding the assets and affairs of the debtor are subject to control or supervision by a foreign court, for the purpose of reorganisation or liquidation; (b) foreign main proceeding means a foreign proceeding taking place in the State where the debtor has the centre of its main interests; (c) foreign non-main proceeding means a foreign proceeding, other than a foreign main proceeding, taking place in a State where the debtor has an establishment within the meaning of subparagraph (f) of this article; (d) foreign representative means a person or body, including one appointed on an interim basis, authorised in a foreign proceeding to administer the reorganisation or the liquidation of the debtor’s assets or affairs or to act as a representative of the foreign proceeding; (e) foreign court means a judicial or other authority competent to control or supervise a foreign proceeding; (f) establishment means any place of operations where the debtor carries out a non-transitory economic activity with human means and goods or services; (g) High Court or Court means the High Court of New Zealand; (h) insolvency administrator means (i) a judicial manager appointed under section 40A of the Life Insurance Act 1908; or (ii) the Official Assignee within the meaning of section 2 of the Insolvency Act 1967; or (iii) a statutory manager appointed under section 38 of the Corporations (Investigation and Management) Act 1989; or (iv) a receiver within the meaning of section 2 of the Receiverships Act 1993; or (v) a liquidator appointed under Part XVI of the Companies Act 1993 or under any other Act; (i) New Zealand insolvency proceeding means a collective judicial or administrative proceeding pursuant to the law in New Zealand relating to the bankruptcy, liquidation, receivership, judicial management, or statutory management of a debtor, or the reorganisation of the debtor’s affairs, where, in all cases, the assets of the debtor are or will be realised for the benefit of secured or unsecured creditors.	Article 2 C14 “Foreign representative” is defined by article 2(d) as a person authorised in a foreign proceeding concerning insolvency. The corollary provision is article 17 which sets out when a foreign proceeding will be recognised. Article 17(1)(b) requires the foreign representative applying for recognition to be a person or body within the meaning of article 2(d). Together the two provisions bestow upon the foreign Court an unfettered discretion to determine whether the person or body seeking assistance is to be recognised as a foreign representative. Given the absence of a formal registration or licensing regime for liquidators or other insolvency practitioners in New Zealand (see generally s 280 Companies Act 1993 and s 5 Receiverships Act 1993), this approach does not seem to cause any difficulties. In any event a New Zealand court can entrust realisation of New Zealand assets to a person other than the foreign representative: article 21(1)(e). C15 The term “insolvency administrator” has been defined in article 2(h) to mean certain types of insolvency administrators who can be appointed under present legislation in New Zealand. C16 The term “New Zealand insolvency proceeding” has been defined in article 2(i) in a generic way. The emphasis is on the collective judicial or administrative nature of the proceeding with the law having to relate to bankruptcy, liquidation, receivership, judicial management, statutory management, or reorganisation of a debtor. While the term “reorganisation” is not commonly in use in New Zealand insolvency statutes, it does cover such things as Proposals under Part XV of the Insolvency Act 1967 and compromises and arrangements under Part XIV and XV of the Companies Act 1993.
Article 3. International obligations of New Zealand To the extent that this Law conflicts with an obligation of New Zealand arising out of any treaty or other form of agreement to which New Zealand is a party with one or more other States, the requirements of the treaty or agreement prevail. Article 4. High Court to have jurisdiction The functions referred to in this Law relating to recognition of foreign proceedings and co-operation with foreign courts shall be performed by the High Court. Article 5. Insolvency administrator may act in foreign State An insolvency administrator is authorised to act in a foreign State on behalf of a New Zealand insolvency proceeding, as permitted by the applicable foreign law. Article 6. Public policy exception (1) Nothing in this Law prevents the High Court from refusing to take an action governed by this Law if the action would be manifestly contrary to the public policy of New Zealand. (2) Before the Court refuses to take an action under paragraph (1) of this article, the Court shall consider whether it is necessary for the Solicitor-General to appear and be heard on the question of the public policy of New Zealand. Article 7. Additional assistance under other laws Nothing in this Law limits the power of a court or an insolvency administrator authorised to act to provide additional assistance to a foreign representative under other laws of New Zealand. Article 8. Interpretation In the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith. Article 9. Right of direct access A foreign representative is entitled to apply directly to the High Court. Article 10. Limited jurisdiction The sole fact that an application pursuant to this Law is made to the High Court by a foreign representative does not subject the foreign representative or the foreign assets and affairs of the debtor to the jurisdiction of the Court for any purpose other than the application.	Article 4 C17 This article vests all jurisdiction under the Model Law in the High Court of New Zealand. Jurisdiction can be exercised either by a High Court Judge or by a Master (see section 7). Article 6 C18 Article 6(2) is new. It enables the court to consider whether it is necessary to hear from the Solicitor-General on any question of public policy of New Zealand raised in the course of any proceeding under the Model Law. The court must consider whether the Solicitor-General should be served before refusing an application under the Model Law on grounds of public policy.
Article 11. Application by foreign representative to commence New Zealand proceeding A foreign representative is entitled to apply to commence a New Zealand insolvency proceeding if the conditions for commencing such a proceeding are otherwise met. Article 12. Participation of foreign representative in New Zealand proceeding Upon recognition by the High Court of a foreign proceeding, the foreign representative is entitled to participate in a New Zealand insolvency proceeding regarding the debtor. Article 13. Access of foreign creditors to New Zealand proceeding (1) Subject to paragraph (2) of this article, foreign creditors have the same rights regarding the commencement of, and participation in, a New Zealand insolvency proceeding as creditors in New Zealand. (2) Paragraph (1) of this article does not affect the ranking of claims in a New Zealand insolvency proceeding or the exclusion of foreign tax and social security claims from such a proceeding. Article 14. Notification to foreign creditors of New Zealand proceeding (1) Whenever under a New Zealand insolvency proceeding notification is to be given to creditors in New Zealand, such notification shall also be given to the known creditors that do not have addresses in New Zealand. The High Court may order that appropriate steps be taken with a view to notifying any creditor whose address is not yet known. (2) Such notification shall be made to the foreign creditors individually, unless the Court considers that, under the circumstances, some other form of notification would be more appropriate. No letters rogatory or other, similar formality is required. (3) When a notification of commencement of a proceeding is to be given to foreign creditors, the notification shall: (a) indicate a reasonable time period for filing claims and specify the place for their filing; (b) indicate whether secured creditors need to file their secured claims; and (c) contain any other information required to be included in such a notification to creditors pursuant to the law of New Zealand and the orders of the Court.	Article 13 C19 Foreign creditors are given the same rights regarding commencement of and participation in a New Zealand insolvency proceeding as creditors in New Zealand. A “New Zealand insolvency proceeding” is defined in article 2(h) of the Model Law. However, nothing in article 13(1) affects the ranking of claims in a New Zealand insolvency proceeding or the exclusion of foreign tax and social security claims from such a proceeding. The reason for this is dealt with in paras 149 and 150 of the text. Article 14 C20 This article provides for notification to be given to foreign creditors who have claims in a New Zealand insolvency proceeding. The term “New Zealand insolvency proceeding” is defined in article 2(h) of the Model Law.
Article 15. Application for recognition of foreign proceeding (1) A foreign representative may apply to the High Court for recognition of the foreign proceeding in which the foreign representative has been appointed. (2) An application for recognition shall be accompanied by: (a) a certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or (b) a certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or (c) in the absence of evidence referred to in subparagraphs (a) and (b), any other evidence acceptable to the Court of the existence of the foreign proceeding and of the appointment of the foreign representative. (3) An application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative. (4) The Court may require a translation of documents supplied in support of the application for recognition into an official language of New Zealand. Article 16. Presumptions concerning recognition (1) If the decision or certificate referred to in article 15(2) indicates that the foreign proceeding is a proceeding within the meaning of article 2(a) and that the foreign representative is a person or body within the meaning of article 2(d), the High Court is entitled to so presume. (2) The Court is entitled to presume that documents submitted in support of the application for recognition are authentic, whether or not they have been legalised. (3) In the absence of proof to the contrary, the debtor’s registered office, or habitual residence in the case of an individual, is presumed to be the centre of the debtor’s main interests.	Article 15 C21 Article 15(4) has been modified to allow for translations into an official language of New Zealand (ie, either English or Maori – see the Mäori Language Act 1987 s 3).
Article 17. Recognition of foreign proceeding (1) Subject to article 6, a foreign proceeding shall be recognised if: (a) the foreign proceeding is a proceeding within the meaning of article 2(a); (b) the foreign representative applying for recognition is a person or body within the meaning of article 2(d); (c) the application meets the requirements of article 15(2); and (d) the application has been submitted to the High Court. (2) The foreign proceeding shall be recognised: (a) as a foreign main proceeding if it is taking place in the State where the debtor has the centre of its main interests; or (b) as a foreign non-main proceeding if the debtor has an establishment within the meaning of article 2(f) in the foreign State. (3) An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time. (4) As soon as practicable, after the Court recognises the foreign proceeding under paragraph (1) of this article, the foreign representative shall notify the debtor, in the prescribed form, that the application has been recognised. (5) The provisions of articles 15, 16, 17 and 18 do not prevent modification or termination of recognition if it is shown that the grounds for granting it were fully or partially lacking or have ceased to exist. Article 18. Subsequent information relating to recognition application From the time of filing the application for recognition of the foreign proceeding, the foreign representative shall inform the High Court promptly of: (a) Any substantial change in the status of the recognised foreign proceeding or the status of the foreign representative’s appointment; and (b) Any other foreign proceeding regarding the same debtor that becomes known to the foreign representative. Article 19. Urgent relief available (1) From the time of filing an application for recognition until the application is decided upon, the High Court may, at the request of the foreign representative, where relief is urgently needed to protect the assets of the debtor or the interests of the creditors, grant relief of a provisional nature, including: (a) staying execution against the debtor’s assets; (b) entrusting the administration or realisation of all or part of the debtor’s assets located in New Zealand to the foreign representative or another person designated by the Court, in order to protect and preserve the value of assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation or otherwise in jeopardy; (c) any relief mentioned in article 21(1)(c) and (d). (2) As soon as practicable, after the Court grants relief under paragraph (1) of this article, the foreign representative shall notify the debtor, in the prescribed form, of the relief that has been granted. (3) Unless extended under article 21(1)(f), the relief granted under this article terminates when the application for recognition is decided upon. (4) The Court may refuse to grant relief under this article if such relief would interfere with the administration of a foreign main proceeding. Article 20. Effects of recognition of foreign main proceeding (1) Upon recognition by the High Court of a foreign proceeding that is a foreign main proceeding: (a) commencement or continuation of individual actions or individual proceedings concerning the debtor’s assets, rights, obligations or liabilities is stayed; (b) execution against the debtor’s assets is stayed; and (c) the right to transfer, encumber or otherwise dispose of any assets of the debtor is suspended. (2) Paragraph (1) of this article does not prevent the Court, on the application of any creditor or interested person, from making an order, subject to such conditions as the Court thinks fit, that the stay or suspension does not apply in respect of any particular action or proceeding, execution, or disposal of assets. (3) Paragraph (1)(a) of this article does not affect the right to commence individual actions or proceedings to the extent necessary to preserve a claim against the debtor. (4) Paragraph (1) of this article does not affect the right to request the commencement of a New Zealand insolvency proceeding or the right to file claims in such a proceeding.
Article 21. Relief on recognition of foreign proceeding (1) Upon recognition by the High Court of a foreign proceeding, whether main or non-main, where necessary to protect the assets of the debtor or the interests of the creditors, the Court may, at the request of the foreign representative, grant any appropriate relief, including: (a) staying the commencement or continuation of individual actions or individual proceedings concerning the debtor’s assets, rights, obligations or liabilities, to the extent they have not been stayed under article 20(1)(a); (b) staying execution against the debtor’s assets to the extent it has not been stayed under article 20(1)(b); (c) suspending the right to transfer, encumber or otherwise dispose of any assets of the debtor to the extent this right has not been suspended under article 20(1)(c); (d) providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor’s assets, affairs, rights, obligations or liabilities; (e) entrusting the administration or realisation of all or part of the debtor’s assets located in New Zealand to the foreign representative or another person designated by the Court; (f) extending relief granted under article 19(1). (2) Upon recognition by the High Court of a foreign proceeding, whether main or non-main, the Court may, at the request of the foreign representative, entrust the distribution of all or part of the debtor’s assets located in New Zealand to the foreign representative or another person designated by the Court, provided that the Court is satisfied that the interests of creditors in New Zealand are adequately protected. (3) In granting relief under this article to a representative of a foreign non-main proceeding, the High Court must be satisfied that the relief relates to assets that, under the law of New Zealand, should be administered in the foreign non-main proceeding or concerns information required in that proceeding.	Article 21 C22 Article 21(1)(g) has been deleted for reasons given in paras 181 and 182 of the text.
Article 22. Protection of creditors and other interested persons (1) In granting or denying relief under article 19 or 21, or in modifying or terminating relief under paragraph (3) of this article, the High Court must be satisfied that the interests of the creditors and other interested persons, including the debtor, are adequately protected. (2) The Court may subject relief granted under article 19 or 21 to conditions it considers appropriate. (3) The Court may, at the request of the foreign representative or a person affected by relief granted under article 19 or 21, or at its own motion, modify or terminate such relief. (4) If (a) an application for recognition has been made in respect of a debtor that is a registered bank within the meaning of section 2 of the Reserve Bank of New Zealand Act 1989; and (b) the High Court has granted that application or the Court has granted relief under article 19; and (c) the debtor is placed in statutory management after that application or relief has been granted, the Court shall, on application of the statutory manager, terminate the relief granted under article 19 or article 21. Article 23. Actions to avoid acts detrimental to creditors (1) Upon recognition by the High Court of a foreign proceeding, the foreign representative has standing to initiate any action that an insolvency administrator may take in respect of a New Zealand insolvency proceeding that relates to any transaction (including any gifts or improvement of property or otherwise), security, or charge that is voidable or may be set aside or altered. (2) When the foreign proceeding is a foreign non-main proceeding, the Court must be satisfied that the action relates to assets that, under the law of New Zealand, should be administered in the foreign non-main proceeding. (3) To avoid any doubt, nothing in paragraph (1) of this article affects the application of the law in New Zealand as it relates to the determination of any action referred to in that paragraph. OR (3) To avoid any doubt, nothing in paragraph (1) of this article affects the doctrine of relation back as it is applied in New Zealand.	Article 23 C23 Article 22(2) has been added so that a statutory manager of a registered bank appointed under the Reserve bank Act can readily obtain termination of relief granted prior to commencement of statutory management (see article 1(2) and para 215). C24 Article 23(3) states, for the avoidance of doubt, that nothing in article 23(1) affects the doctrine of relation back as applied in New Zealand. This preserves the current law set out in paras 43–44 of the text.
Article 24. Intervention by foreign representative in New Zealand proceeding Upon recognition by the High Court of a foreign proceeding, the foreign representative may, provided the requirements of the law of New Zealand are met, intervene in any proceedings in which the debtor is a party. Article 25. Co-operation and communication by High Court (1) In matters referred to in article 1, the High Court shall co-operate to the maximum extent possible with foreign courts or foreign representatives, either directly or through an insolvency administrator. (2) The Court is entitled to communicate directly with, or to request information or assistance directly from, foreign courts or foreign representatives. Article 26. Co-operation and communication by insolvency administrator (1) In matters referred to in article 1, an insolvency administrator shall, in the exercise of its functions and subject to the supervision of the High Court, co-operate to the maximum extent possible with foreign courts or foreign representatives. (2) The insolvency administrator is entitled, in the exercise of its functions and subject to the supervision of the Court, to communicate directly with foreign courts or foreign representatives. Article 27. Forms of co-operation Co-operation referred to in articles 25 and 26 may be implemented by any appropriate means, including: (a) appointment of a person or body to act at the direction of the High Court; (b) communication of information by any means considered appropriate by the Court; (c) co-ordination of the administration and supervision of the debtor’s assets and affairs; (d) approval or implementation by courts of agreements concerning the co-ordination of proceedings; and (e) co-ordination of concurrent proceedings regarding the same debtor.	Article 25 C25 Article 25(1) allows the High Court to co-operate either directly or through an insolvency administrator. The term “insolvency administrator” is defined in article 2(i) of the Model Law. The manner in which the court co-operates or communicates would need to be in accordance with principles of natural justice as required by the New Zealand Bill of Rights Act 1990 s 25. Article 26 C26 This article, requiring an insolvency administrator as defined in article 2(i) to co-operate to the maximum extent possible with foreign courts or foreign representatives, is subject to the supervision of the High Court. For the avoidance of doubt it is stated in article 26(2) that the insolvency administrator may communicate directly with foreign courts or foreign representatives. Article 27 C27 No additional form of co-operation has been added as contemplated by article 27(f) of the Model Law. As the article is expressed in inclusive terms, it is not thought necessary to add any additional forms of co-operation.
Article 28. Commencement of New Zealand proceeding after recognition After recognition by the High Court of a foreign main proceeding, a New Zealand insolvency proceeding may be commenced only if the debtor has assets in New Zealand; the effects of that proceeding shall be restricted to the assets of the debtor that are located in New Zealand and, to the extent necessary to implement co-operation and co-ordination under articles 25, 26 and 27, to other assets of the debtor that, under the law of New Zealand, should be administered in that proceeding. Article 29. Co-ordination of foreign proceeding and New Zealand proceeding Where a foreign proceeding and a New Zealand insolvency proceeding are taking place concurrently regarding the same debtor, the High Court shall seek co-operation and co-ordination under articles 25, 26 and 27, and the following shall apply: (a) when the New Zealand insolvency proceeding is taking place at the time the application for recognition of the foreign proceeding is filed- (i) any relief granted under article 19 or 21 must be consistent with the New Zealand insolvency proceeding; and (ii) if the foreign proceeding is recognised in New Zealand as a foreign main proceeding, article 20 does not apply; (b) when the New Zealand insolvency proceeding commences after recognition, or after the filing of the application for recognition, of the foreign proceeding- (i) any relief in effect under article 19 or 21 shall be reviewed by the Court and shall be modified or terminated if inconsistent with the New Zealand insolvency proceeding; and (ii) if the foreign proceeding is a foreign main proceeding, the stay and suspension referred to in article 20(1) shall be modified or terminated pursuant to article 20(2) if inconsistent with the New Zealand insolvency proceeding; (c) in granting, extending or modifying relief granted to a representative of a foreign non-main proceeding, the Court must be satisfied that the relief relates to assets that, under the law of New Zealand, should be administered in the foreign non-main proceeding or concerns information required in that proceeding.	Article 29 C28 This deals with concurrent foreign and New Zealand insolvency proceedings.
Article 30. Co-ordination of several foreign proceedings In matters referred to in article 1, in respect of more than one foreign proceeding regarding the same debtor, the High Court shall seek co-operation and co-ordination under articles 25, 26 and 27, and the following shall apply: (a) any relief granted under article 19 or 21 to a representative of a foreign non-main proceeding after recognition of a foreign main proceeding must be consistent with the foreign main proceeding; (b) if a foreign main proceeding is recognised after recognition, or after the filing of an application for recognition, of a foreign non-main proceeding, any relief in effect under article 19 or 21 shall be reviewed by the Court and shall be modified or terminated if inconsistent with the foreign main proceeding; (c) if, after recognition of a foreign non-main proceeding, another foreign non-main proceeding is recognised, the Court shall grant, modify or terminate relief for the purpose of facilitating co-ordination of the proceedings. Article 31. Presumption of insolvency if foreign main proceeding recognised In the absence of evidence to the contrary, recognition of a foreign main proceeding is, for the purpose of commencing a New Zealand insolvency proceeding, proof that the debtor is insolvent. Article 32. Rule of payment in concurrent proceedings Without prejudice to secured claims or rights in rem, a creditor who has received part payment in respect of its claim in a proceeding pursuant to a law relating to insolvency in a foreign State may not receive a payment for the same claim in a New Zealand insolvency proceeding regarding the same debtor, so long as the payment to the other creditors of the same class is proportionately less than the payment the creditor has already received.

New Zealand Law Commission

Draft Cross-Border Insolvency Act 200–